Related Advisories

The Tax Cuts and Jobs Act, (The Act), has brought with it many changes that impact taxpayers to varying degrees. One of the provisions that will affect all Americans is the new tax brackets created by the legislation.

There are currently seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. The bracket depends on taxable income and filing status.

Below you will find a breakdown of the brackets and the federal income tax rates that apply to the 2018 tax year and relate to the tax return you’ll file this year in April 2019. The second set shows the brackets and rates that apply to the current 2019 tax year for the tax return you will need to file in April of 2020.

Break Down of the New Tax Brackets

Tax rate

Taxable income bracket

Tax owed

10%

$0 to $9,525

10% of taxable income

12%

$9,526 to $38,700

$952.50 plus 12% of the amount over $9,525

22%

$38,701 to $82,500

$4,453.50 plus 22% of the amount over $38,700

24%

$82,501 to $157,500

$14,089.50 plus 24% of the amount over $82,500

32%

$157,501 to $200,000

$32,089.50 plus 32% of the amount over $157,500

35%

$200,001 to $500,000

$45,689.50 plus 35% of the amount over $200,000

37%

$500,001 or more

$150,689.50 plus 37% of the amount over $500,000

MARRIED FILING JOINTLY for the 2018 Tax Year

Tax rate

Taxable income bracket

Tax owed

10%

$0 to $19,050

10% of taxable income

12%

$19,051 to $77,400

$1,905 plus 12% of the amount over $19,050

22%

$77,401 to $165,000

$8,907 plus 22% of the amount over $77,400

24%

$165,001 to $315,000

$28,179 plus 24% of the amount over $165,000

32%

$315,001 to $400,000

$64,179 plus 32% of the amount over $315,000

35%

$400,001 to $600,000

$91,379 plus 35% of the amount over $400,000

37%

$600,001 or more

$161,379 plus 37% of the amount over $600,000

MARRIED FILING SEPARATELY for the 2018 Tax Year

Tax rate

Taxable income bracket

Tax owed

10%

$0 to $9,525

10% of taxable income

12%

$9,526 to $38,700

$952.50 plus 12% of the amount over $9,525

22%

$38,701 to $82,500

$4,453.50 plus 22% of the amount over $38,700

24%

$82,501 to $157,500

$14,089.50 plus 24% of the amount over $82,500

32%

$157,501 to $200,000

$32,089.50 plus 32% of the amount over $157,500

35%

$200,001 to $300,000

$45,689.50 plus 35% of the amount over $200,000

37%

$300,001 or more

$80,689.50 plus 37% of the amount over $300,000

HEAD OF HOUSEHOLD for the 2018 Tax Year

Tax rate

Taxable income bracket

Tax owed

10%

$0 to $13,600

10% of taxable income

12%

$13,601 to $51,800

$1,360 plus 12% of the amount over $13,600

22%

$51,801 to $82,500

$5,944 plus 22% of the amount over $51,800

24%

$82,501 to $157,500

$12,698 plus 24% of the amount over $82,500

32%

$157,501 to $200,000

$30,698 plus 32% of the amount over $157,500

35%

$200,001 to $500,000

$44,298 plus 35% of the amount over $200,000

37%

$500,001 or more

$149,298 plus 37% of the amount over $500,000

2019 Federal Income Tax Brackets (for taxes due in April 2020) SINGLE FILERS for the 2019 Tax Year

Tax rate

Taxable income bracket

Tax owed

10%

$0 to $9,700

10% of taxable income

12%

$9,701 to $39,475

$970 plus 12% of the amount over $9,700

22%

$39,476 to $84,200

$4,543 plus 22% of the amount over $39,475

24%

$84,201 to $160,725

$14,382.50 plus 24% of the amount over $84,200

32%

$160,726 to $204,100

$32,748.50 plus 32% of the amount over $160,725

35%

$204,101 to $510,300

$46,628.50 plus 35% of the amount over $204,100

37%

$510,301 or more

$153,798.50 plus 37% of the amount over $510,300

MARRIED FILING JOINTLY for the 2019 Tax Year

Tax rate

Taxable income bracket

Tax owed

10%

$0 to $19,400

10% of taxable income

12%

$19,401 to $78,950

$1,940 plus 12% of the amount over $19,400

22%

$78,951 to $168,400

$9,086 plus 22% of the amount over $78,950

24%

$168,401 to $321,450

$28,765 plus 24% of the amount over $168,400

32%

$321,451 to $408,200

$65,497 plus 32% of the amount over $321,450

35%

$408,201 to $612,350

$93,257 plus 35% of the amount over $408,200

37%

$612,351 or more

$164,709.50 plus 37% of the amount over $612,350

MARRIED FILING SEPARATELY for the 2019 Tax Year

Tax rate

Taxable income bracket

Tax owed

10%

$0 to $9,700

10% of taxable income

12%

$9,701 to $39,475

$970 plus 12% of the amount over $9,700

22%

$39,476 to $84,200

$4,543 plus 22% of the amount over $39,475

24%

$84,201 to $160,725

$14,382.50 plus 24% of the amount over $84,200

32%

$160,726 to $204,100

$32,748.50 plus 32% of the amount over $160,725

35%

$204,101 to $306,175

$46,628.50 plus 35% of the amount over $204,100

37%

$306,176 or more

$82,354.75 plus 37% of the amount over $306,175

HEAD OF HOUSEHOLD for the 2018 Tax Year

Tax rate

Taxable income bracket

Tax owed

10%

$0 to $13,850

10% of taxable income

12%

$13,851 to $52,850

$1,385 plus 12% of the amount over $13,850

22%

$52,851 to $84,200

$6,065 plus 22% of the amount over $52,850

24%

$84,201 to $160,700

$12,962 plus 24% of the amount over $84,200

32%

$160,701 to $204,100

$31,322 plus 32% of the amount over $160,700

35%

$204,101 to $510,300

$45,210 plus 35% of the amount over $204,100

37%

$510,301 or more

$152,380 plus 37% of the amount over $510,300

How MBAF Can Help

The changes in the tax brackets created by the Tax Cuts and Jobs Act were designed to simplify the filing process, but in reality, they could also add a level of new complexity.

Since tax season is upon us, now is the time to be sure you are entirely up to speed and understand how to maximize the potential benefits to be found in this tax legislation. As it relates to tax brackets, we can help you find ways to maximize deductions and otherwise reduce your taxable income, to make sure you wind up in the lowest tax bracket possible for your particular circumstances.

Compliance with and understanding the changes in the tax codes regarding the Tax Cuts and Jobs Act can be complex. If you would like to benefit from our expertise in these areas, or if you have further questions on this Advisory, do not hesitate to contact our Tax and Accounting Specialists, or call us at 1-800-239-1474.

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